The Federal Court has ordered Trivago to pay penalties of $44.7 million for making misleading representations about hotel room rates on its website and in television advertising, in proceedings brought by the ACCC.
In January 2020, the Federal Court found that Trivago had breached the Australian Consumer Law by misleading consumers when representing that its website would quickly and easily help users identify the best deal or cheapest rates available for a given hotel.
In fact, Trivago used an algorithm which placed significant weight on which online hotel booking site paid Trivago the highest cost-per-click fee in determining which rates to highlight on its website and as a result often did not highlight the cheapest rates for consumers.
Trivago admitted that between December 2016 and September 2019 it received approximately $58 million in cost-per-click fees from clicks on offers that were not the cheapest available offer for a given hotel, causing consumers to overpay hotel booking sites approximately $38 million for rooms featured in those offers.
“One of the ACCC’s key priorities is to hold online businesses accountable for their representations to consumers and to ensure consumers are fully aware of the way these supposedly free services actually work and what influences the prices they display,” ACCC ChairGina Cass-Gottliebsaid.
“The way Trivago displayed its recommendations when consumers were searching for a hotel room, meant consumers were misled into thinking they were getting a great hotel deal when that was not the case.”
“Trivago also mislead consumers by using strike-through prices which gave them the false impression that Trivago’s rates represented a saving when in fact they often compared a standard room with a luxury room at the same hotel,” Ms Cass-Gottliebsaid.
“Trivago’s conduct took advantage of consumers’ desire to find the best deal, and the Court’s decision to order such a significant penalty reflects the seriousness of Trivago’s conduct.”
“This penalty sends a strong message not just to Trivago, but to other comparison websites, that they must not mislead consumers when making recommendations,” Ms Cass-Gottliebsaid.
Background
Trivago is part of the Expedia Group. Trivago’s website aggregates deals offered by online hotel booking sites (like Expedia, Hotels.com and Booking.com) and hotel proprietors’ own websites for available rooms at a hotel and highlights one offer out of all online hotel booking sites (referred to as the ‘Top Position Offer’). However, Trivago’s own data showed that higher-priced room rates were selected as the Top Position Offer over alternative lower-priced offers in 66.8 per cent of listings.
Trivago’s revenue was primarily obtained from cost-per-click (CPC) payments from online hotel booking sites, which significantly affected that booking site’s appearance and prominence in search results.
In August 2018the ACCC instituted proceedings against Trivagoand in January 2020,the Federal Court found Trivago had breached the Australian Consumer Lawwhen it made misleading representations about hotel room rates on its website and television advertising.
In March 2020, Trivago appealed the Court’s decision. This was dismissed by the Full Federal Court in November 2020.
The following is an example of Trivago’s online price display taken on 1 April2018. For example, the $299 deal is highlighted in the sample image, when a cheaper deal was available if a consumer clicked “More deals” (underneath the offers from other booking sites in the middle panel).
A sample of Trivago’s TV advertisem*nt as at 24 December 2017.
FAQs
What you need to know. The Federal Court has ordered Trivago to pay a total of $44.7 million in pecuniary penalties for misleading consumers and breaching the Australian Consumer Law through claims made during television advertisem*nts and on its website with respect to offering the cheapest or best hotel deals.
What is the controversy with Trivago hotels? ›
In January 2020, the Federal Court had ruled that Trivago had misled consumers by representing its website would quickly and easily help users identify the cheapest rates available for a given hotel.
What happened to hotel Trivago? ›
The Federal Court has ordered Trivago to pay penalties of $44.7 million for making misleading representations about hotel room rates on its website and in television advertising, in proceedings brought by the ACCC.
Does Trivago charge you? ›
We do not collect any payments from you for your stay. Any hotel product or service booked, and after-booking support is provided by one of our selected partners. We always aim to clearly inform you about who our selected partner is, before clicking on “Confirm booking” on the checkout page.
What happened to the guy from trivago? ›
Williams, now 57, is back in the U.S. after living in Germany for more than 20 years. Skift recently caught up with him in a video chat while he was at his mom's condo in the Houston area. What do you think of Trivago's move to use AI TV commercials that eliminated the need to use multiple actors?
What happened to the girl from trivago? ›
Miller still lives in Berlin, where the Germans have their own “Trivago Mann”, but since the campaign blew up she has started to get recognised even there: “Someone will tap me on the shoulder in the doctor's surgery and I'm like, 'Oh yeah, that's right, I'm the Trivago girl, I forgot'.”
Is Trivago owned by Expedia? ›
Expedia Group, Inc. is an American travel technology company that owns and operates travel fare aggregators and travel metasearch engines, including Expedia, Hotels.com, Vrbo, Travelocity, Hotwire.com, Orbitz, Ebookers, CheapTickets, CarRentals.com, Expedia Cruises, Wotif, and Trivago.
Why did Trivago fail? ›
The court found that search results were ordered giving preference to the highest paying "cost per click" advertisers, rather than outright cheapest prices. It was also found that the company's television advertising misled consumers by purporting to be "impartial and objective", when it fact it wasn't.
Who owns Trivago? ›
Expedia Lodging Partner Ser...
Trivago's competitors and similar companies include Agoda, Sojern, Booking.com, Airbnb, Vrbo and TripAdvisor. Trivago is a company that operates an online accommodation search platform. Agoda is a company providing a travel platform. Sojern is a digital marketing platform for travel marketers.
Newsflash: Almost all of the travel sites you've heard of are owned by Expedia or Priceline. Priceline couldn't buy Expedia because it would get killed by antitrust concerns. Expedia also owns Travelocity, Orbitz, Hotwire, Hotels.com, VRBO, HomeAway, has a majority stake in Trivago, etc.
Who is the girl in the trivago hotel? ›
You've no doubt seen this familiar face on your television screens. The trivago girl is Aussie-born actor and musician, Gabrielle Miller, and there's more to her than meets the eye.
Who pays trivago? ›
Yes, trivago is free for hoteliers. It's the booking sites that pay to advertise your property's rates and availability on our site. So, there's no extra cost to you or your future guests.
How much do hotels pay trivago? ›
It depends on the Location, hotel class and price, just expect that they will you 10–30% but I suggest you should search direct hotel booking much less and cheaper than Trivago. Traveler, I've lived in 5 countries and enjoyed every and each of them. Booking or Expedia takes around 20–25% from the price someone pays.
What is better than trivago? ›
Compare hotel prices on 270+ booking sites at once!
The best alternatives to Trivago are Pruvo, Cozycozy, and OYO Hotel Finder. If these 3 options don't work for you, we've listed a few more alternatives below. What do you think of Trivago?
How much did Expedia pay for trivago? ›
In December 2012, Expedia, an American travel company, announced that it would acquire a stake in Trivago for $632 million. The deal was completed in 2013. In December 2014, Trivago acquired mobile app product and development company Rheinfabrik.
Who is the parent company of trivago? ›
About trivago
Part of Expedia Group (NASDAQ: TRVG), trivago's mission is to be the obvious choice when travelers are searching for a hotel.
How much does trivago make a year? ›
Revenue in 2023 (TTM): $0.52 B
According to trivago's latest financial reports the company's current revenue (TTM ) is $0.51 B. In 2022 the company made a revenue of $0.55 B an increase over the years 2021 revenue that were of $0.42 B.
Who bought trivago? ›
Expedia Completes Acquisition Of Majority Interest In trivago.
